Class Actions in Canada

Thursday, May 03, 2007

April 2007

I have just returned from another fantastic Osgoode Class Action Conference. Thanks to all of you we attended. We look forward to receiving your feedback on how we can improve the conference in years ahead.

My only disappointment was seeing Kirk Baert transformed from the cuddly post-Pearson/Hollick sad sack into the cocky post-Nortel/Indian Residential Schools powerhouse. Kirk was a lot more loveable in his previous incarnation. For those of you interested in carrying on the Good Kirk/Evil Kirk debate, you can visit the following blog:

There was a tremendous amount of class action activity over the last two months, so sit back, have a Moosehead (Atlantic Canada), martini (Central Canada), rye and coke (Prairies), or cappuccino with low fat whip cream and chocolate sprinkles (BC), and enjoy the ride through the jurisprudence.

CHICKEN AND EGGS: PRE-CERTIFICATION ISSUES AND TIMING

In Murray v. Alberta, 2007 ABQB 231, the court determined that the defendant should not be required to file an affidavit of records in advance of certification. The court also affirmed that the case management powers under s.13 of the Act were available to the court prior to certification. The court did hold that the defendant should file a defence in advance of certification, since there was no indication that this task would take much effort, or that the defence would have to be substantially reformulated depending on the outcome of the certification hearing. The writer was counsel for the Province.

1. Enforcement of a "no class action" clause: The defendant sought to rely on a clause on the franchise agreement that provided that all disputes would be brought by way of individual actions. They sought to distinguish the earlier Smith v. National Money Mart Co. on three grounds:(a) in this case, there were no competing arbitration statutes to reconcile;(b) the clause in the franchise agreements did not purport to oust the jurisdiction of the Superior Court in favour of an arbitrator; rather, it merely required that the actions continue as individual actions; and(c) unlike Smith, where the plaintiffs alleged that payday lending agreements were invalid because they result in the receipt of interest at a criminal rate, the plaintiffs in this action did not allege that the franchise agreements were illegal.

The court rejected this argument stating: "In my view, the fact that there is in this case no competing statute requiring this Court to stay the action is a factor that favours the plaintiffs, rather than the defendants. My discretion to refuse to grant the stay at this juncture, or a subsequent juncture, is not limited by legislation." The court pushed the final resolution of the issue over to the certification hearing stating: "This approach - determining the legal effect of the clause at issue, if necessary to do so, as part of the preferable procedure test - will in this case hopefully minimize "litigation by installments" and therefore best ensure the fair and expeditious determination of this proposed class proceeding. This motion shall accordingly be determined at that time."

2. Pleadings attacks: The defendant sought to strike the civil conspiracy claim. The court rejected this effort stating: "I am not satisfied that it is plain and obvious that the plaintiffs have no cause of action against the GFS Defendants in civil conspiracy because their claim cannot satisfy the requirement of the second branch of the Canada Cement Lafarge test that the conduct of the defendants is unlawful." The court pushed a related complaint about the sufficiency of the civil conspiracy pleading over to the certification hearing. Finally, a complaint about certain other paragraphs of the pleading and supporting affidavit were also deferred to the certification hearing given that resolution of these issues would not finally resolve the action.

3. Security for Costs: The first issue was whether the defendants could file such a motion in the absence of having filed a defence. The court found that they could stating: "I am satisfied that s. 12 of the CPA affords the case management judge in a putative class proceeding the discretion to permit the defendants to bring a motion for security for costs before filing a statement of defence if he or she considers it appropriate to do so to ensure the fair and expeditious determination of the class proceeding.". However, the court declined to award security against the lead defendants, invoking s.31 of the Ontario Act: ""Public interest" has been broadly defined in this context and includes something of interest to the community at large beyond the class members....One collateral issue raised in this action - namely the effect of no class action clauses in franchise agreements - has not been considered before, will be of interest to the large community of franchisees in Ontario who are not class members and might be seen as a public interest question. It is clear that the "costs of the defendant" in Rule 56.01(1) refers to costs awarded by the court, and not costs incurred. Given that I am not satisfied at this juncture that it is more likely than not that a costs order against the Quizno's Defendants would follow an unsuccessful certification motion, I do not have good reason to believe that the plaintiffs have insufficient assets in Ontario to satisfy a costs award in favour of the Quizno's defendants." The court also considered that some of the defendants had an ability to effect the ability to satisfy a costs award: "Had I concluded that a costs award in favour of Quizno's was likely if the plaintiffs were unsuccessful on the certification motion, and there was good reason to believe that, having regard to realization risks, the plaintiffs have insufficient assets in Ontario to satisfy a costs award in favour of the Quizno's Defendants, the ability of Quizno's to influence the realization value of Oakville's assets would in my view be a factor to consider in determining what award was "just" in the circumstances, and in this class action context would militate against the grant of an award of security for costs."

As against the collateral defendants who were not parties to the franchse agreement, the court did award security: "While it will be an issue at the certification hearing, and therefore of interest to the GFS Defendants, the GFS Defendants are not parties to, or affiliates of parties to, the "no class action" provision. At this juncture, I think it is more likely than not that the GFS Defendants would be entitled to a costs award if the certification motion were unsuccessful." However, the court moderated the award stating: "The quantum of security for costs awarded in proceedings that are not class actions, or putative class actions, is in my experience typically conservative. The Court of Appeal in Pearson v. Inco Ltd., … recently reiterated that the objective of the CPA of enhanced access to justice is a factor in fixing the costs of a certification motion. I am of the view that it is also a factor in determining what order for security for costs is just in the circumstances. Having regard to this, and the modest amount of costs an unsuccessful plaintiff in a certification motion is typically ordered to pay, the GFS Defendants are awarded $10,000 as security for costs."

McLelland v. 2332-4197 Quebec inc, 2007 QCCS 658: The defendant sought to strike certain allegations and documents filed with the motion for certification. The court held that such preliminary motions were appropriate if their purpose was to narrow the focus of the certification application, rather than to achieve delay. However, the court held that the objections raised went more to the merits than to anything the judge would require for certification.

Champagne v. Daimler Chrysler Canada inc, 2007 QCCS 1216: The court refused several pre-certification particulars requested in this automobile defect case, but did allow production of certain documents relevant to when the Petitioner discovered the defect. The court held that these documents would be relevant to certification.

Leblanc v. Capital d'Amerique CDPQ inc, 2007 QCCS 1757: The court ordered certain witnesses to testify at the certification hearing, and also ordered production of certain limited information from transcripts in parallel litigation.

Option Consommateur v. Banque Nationale du Canada, 2007 QCCS 1080: The court allowed the defendant to file certain affidavit material on certification. The court stated that the amount of material to be provided should be proportional to the stakes involved. In this case, the proposed material would help focus the hearing and would provide helpful information to the court on certification.

Option Consommateurs v. Bell Mobilite, 2007 QCCS 862: The defendant was given leave to examine the representative at the certification hearing on one limited aspect of the pleading, and a provisional right to file evidence on one specific aspect of the claim.Labelle v. Agence de developpement de reseaux locaux de services de sante et de services sociaux - Region de Montreal, 2007 QCCS 1113: The court allowed relatively broad based examination of the representative plaintiff on their capacity to act as representative, the number of class members, and the similarities in the situation of the various class members. However, the court refused production of additional medical documentation.

CRIMINAL INTEREST RATE/PAYDAY LOAN UPDATEBodnar v. The Cash Store, 2007 BCSC 735: The court refused to add the lenders to this certified payday loan class action against a broker. The court held that there was insufficient evidence to support the application. The application was adjourned to allow the plaintiff to reapply on further evidence. The writer is counsel for the broker defendant in this action.

Kilroy v. AOK Payday Loans, 2007 BCCA 231: The Court of Appeal upheld the merits judgement in favour of the class in this payday loan case. The writer acted for the defendant on the appeal.

MacKinnon v. National Money Mart Co., 2007 BCSC 348: The court consolidated and certified a class action against the defendant.

Markson v. MNBA, 2007 ONCA 334: The Court of Appeal overturned the earlier refusal to certify this criminal interest rate/VISA case. The court held that the suggestion that the defendant could not calculate individual damages should not result in the case being refused certification, but rather supported the plaintiff’s (new) suggestion that that problem called for invocation of ss.23 and 24 of the CPA (aggregate assessments and statistical evidence) . The court found that there was a “reasonable likelihood” that the aggregate assessment provision could be invoked, which is all that was required at the certification stage.

The court held that the impracticability requirement of the right to aggregate assessment was satisfied if damages could be established on a class-wide basis, but entitlement to monetary relief may depend on individual assessments. The statistical rights in s.23 could be used to help establish the class-wide damages. The court accepted that this solution might result in some persons receiving awards undeservedly, but this was an accepted outcome from the clear operation of the sections.

The court distinguished Chadha on the basis that there was no evidence in Chadha that the price fixing had been passed on to the ultimate consumer. There was no question in this case that the challenged fees had been charged to the consumers. The court added back certain breach of contract and restitutionary common issues, as well as the issue as to whether an aggregate award was possible. The court also found that the voluntariness defence could be assessed as a common issue.

On preferability, the court held that the fact that the defendant might change their business model if the matter was certified was not a relevant consideration favoring individual litigation, since the defendant would presumably alter their business model even if their conduct was found to be illegal in individual litigation. The court held that not allowing the case to proceed as a class action would only result in the defendant being able to retain their illegal profit. The court held that judicial economy does not mean ensuring that there is no action brought at all. “Judicial economy should focus on the relationship of the common issues to the other issues in the case”. The court noted that if voluntariness and s.23 and 24 could be determined and applied on a class wide basis, the whole case could be resolved on a common basis.

The court confirmed that a defendant can refuse to deal with a class member who refuses to opt out of an ongoing action. However, to ensure that any communications regarding this issue were not abusive, the court established the following protocol:

“The plaintiffs shall be required to provide up-to-date lists of class members who have opted-out to Money Mart daily, Monday through Friday, on an ongoing basis during the opt-out period.

Money Mart is free to determine from its records, including from the information provided by the plaintiffs, whether or not an individual applying for a loan is a class member, and if so, decline to make a further loan. It shall not ask an individual applying for a loan whether or not he/she is a class member. It may ask applicants whether or not they obtained payday loans prior to the date that is the end date of the class period.

The following should be added to the one-page form of Notice proposed by class counsel, under the heading addressing opting-out: "Money Mart may choose not to make a Fast Cash Advance or Payday Loan to class members who participate in the class action." "How" to opt-out should also be included here under this heading. The balance of the language proposed by counsel for Money Mart in its draft form of Notice should not be included.

Money Mart shall not initiate communication with customers regarding the class action or the opt-out procedure until after the customer has applied for a loan and Money Mart has either declined to make the loan or made the loan. Money Mart's in-store communication with class members regarding why it has declined a loan, the class action and the opt-out procedure shall be restricted to directing class members to the Notice and the brochure (or "Questions and Answers"). Money Mart shall take all reasonable steps to ensure all in-store personnel are aware of this restriction and comply with it.

Money Mart shall provide a draft brochure (or draft "Questions and Answers") to the plaintiffs within seven days; the plaintiffs shall work with Money Mart in the ensuing seven days to resolve the language. If they are unable to do so, I will make myself available to promptly resolve any matters that the parties cannot. Money Mart will be responsible for producing, at its expense, a sufficient number of copies of the brochure (or "Questions and Answers") within seven days thereafter. Thus, the total delay resulting from the brochure/ Questions and Answers should be not more than 21 days. The Notice should be published only once the brochure/ Questions and Answers publication is available. I may be spoken to if counsel is of the view that another process would be more workable.

A class member may opt-out by sending a written election to opt-out, signed by the class member, by prepaid mail, courier or fax, or by email, as provided in the order certifying the action. Money Mart shall not send opt-out forms or give e-mail notices on behalf of class members. Money Mart may, but is not required to, make stamped or postage paid envelopes, addressed to Howie & Partners, Chartered Accountants, 3036 Walker Road, Windsor, Ontario, Canada N8W 3R4, Attention: Money Mart Class Action, available in the receptacle located at the bottom of the sign displaying the Notice in each of its locations.”

2. On a dispute about the length of the opt out period, the court set it at 6 months.

3. The court refused an application by the defendant to extend the class period beyond the previously approved cut-off date (publication of the notice). The defendant had wanted to extend the period so that it would be more clear that every new customer was a class member who would have to opt out in order to obtain a loan.

RIGHTS OF MINORS

Association pour l'acces a l'avortement v. Quebec (Procureur general), 2007 QCCS 782: In this successful abortion rights action, the court ordered that women 14 years of age and older could access the proceeds of the judgment without parental consent given that 14 was the age of consent for health care. In a related judgment in the same case, the court addressed lawyer’s fees: 2007 QCCS 1796. Fees of $3.3 million were approved, or 25% of the judgment. The court also awarded $5000 to the representative plaintiff for the work she performed in advancing the case.

INDIAN RESIDENTIAL SCHOOLS UPDATE

Sparvier v. Canada, 2007 SKCA 37: The Court of Appeal confirmed that the proper interpretation of the fee provisions in the national settlement agreement required that the federal government pay the minimum $25 million to Merchant Law Group without any audit right.

APPEAL PROCEDURE CONSIDERED IN ONTARIO AND QUEBEC

Regroupement des citoyens contre la pollution v. Alex Couture inc, 2007 QCCA 565: The class appealed the failure to certify the case against certain defendants. The appeal was rejected. Of note was the legal finding that the plaintiff is entitled to appeal the dismissal of certification as against certain defendants based on the cause of action requirement, even if the case is certified against others.Ludwig v. 1099029 Ontario Ltd, 2007 ONCA 266: The court held that excluded plaintiffs required leave to appeal a decision granting certification to another part of the class. The court held that it was not a final order because the excluded group could still pursue individual actions. The court distinguished the contrary Quebec authority (that allows such appeals by plaintiffs as of right) as follows:“In a brief endorsement in Billette c. Groupe Dumoulin Electronique inc., [2003] J.Q. no 23162, the Court of Appeal for Quebec said that a member of the plaintiff group who had been excluded from the class had the right to appeal that decision with leave, treating the decision as one that denied certification to the excluded plaintiffs. I would not apply the result in that case to an appeal under the Ontario provisions for two reasons. The first is that the judgment is brief and does not provide any discussion or analysis of the consequences of interpreting the right to appeal from an order denying certification to include an order that limits the class that is certified in the context of the provisions of the Quebec Act. The second is that in Quebec, unlike in Ontario, there is no appeal at all from a decision granting certification. The fact that there is absolutely no appeal, either by right or by leave, from a decision that grants certification may have influenced the court's interpretation of the effect of a decision that excludes some prospective plaintiffs from the certified class”

Spieser v. Canada (Procureur general), 2007 QCCS 1207: The court certified this environmental contamination case. The allegation was that TCE was distributed from a munitions factory. The claim included personal injury. The court refused to exclude military personnel from the class.

Defazio v. Ontario, 2007 OJ 902 (S.C.): The plaintiffs allege that they were exposed to asbestos as a result of the construction of the new Sheppard-Yonge subway station. The court first determined that the certification motion should be determined on the basis of the Statement of Claim as it existed as the time of the hearing, and not based on an amended Statement of Claim submitted after the hearing: "] I am satisfied that the fact that Rule 26.02(a) permits a plaintiff to amend his statement of claim without leave before a defendant has filed his statement of defence does not mean that I cannot, in the circumstances, make an order pursuant to section 12 of the CPA. Mangan is authority for this approach."

The court refused certification stating: "A class proceeding is not the preferable procedure for the resolution of the claims of the members of the class. Proof of exposure, proof of causation, liability and actual damages or loss suffered are individual issues. The wide variety of class members will result in a plethora of individual circumstances. The nature of the damages alleged will require individual expert evidence. The individual issues overwhelm the limited common issues. Resolution of the limited common issues in this action would not significantly advance this litigation. While I come to the conclusion that a class proceeding is not the preferable procedure without regard to the WSIA, the fact that the WSIA provides a no-fault based compensation scheme for proposed class members who are workers buttresses my conclusion."

The court had concerns about the class definition (particularly the non-objective nature of the requirement of "exposure to asbestos"), but acknowledged that it would be possible to craft one that was appropriate. However, given the conclusion on preferable procedure, the court declined to do so.

The court had concerns with most of the proposed common issues, in particular whether or not the class members suffered exposure to asbestos. The court acknowledged that the existence of a duty of care may be common, but held that breach would not be. The court questioned whethe punitive damages could be a common issue when causation and damages were not common issues.

The court found that the representative plaintiffs were not appropriate given that they had not moved the action forward with dispatch (para. 118). The court also expressed some concern about the lack of experience of the proposed class counsel (para.119), and the ability of the class representatives to fund disbursements (para.128).

FEES CONSIDERED IN SUCCESSFUL CLASS ACTION

Girard v. 2944-7828 Quebec inc, 2007 QCCS 1136: The court had to address the problem that the amount payable to the class was exceeded by the amount advanced by the Fonds and the fees sought by class counsel. The court noted that the funding received from the Fonds d'aide aux recours collectifs substantially reduced the risk of the action. The court reduced the fee request so that there would be some money flowing into the class’ hands.

HISLOP DETERMINED ON THE MERITS BY SCC

Hislop v. Canada, 2007 SCC 10: The court dismissed both appeals in this same-sex pension benefits case. Most notably, the court found that:1. The provision denying benefits was unconstitutional.2. The court confirmed that estates of those survivors who died more than 12 months before the coming into force of the 2000 amendments do not have standing to claim a s. 15(1) Charter right on behalf of the deceased survivor. The use of the term “individual” in s. 15(1) was intentional and indicates that s. 15(1) applies to natural persons only. Estates have no dignity that may be infringed.3. With respect to the deceased representative plaintiff Hislop however, the court confirmed that where a party dies pending appeal, the appeal survives even if the original cause of action would not. More generally, the estate of any class member who was alive on the date that argument concluded in the Superior Court of Justice and who otherwise met the requirements under the CPP, was entitled to the benefit of the judgment.4. On the request for retroactive benefits, the court held as follows: Because courts are adjudicative bodies that, in the usual course of things, are called upon to decide the legal consequences of past happenings, they generally grant remedies that are retroactive to the extent necessary to ensure that successful litigants will have the benefit of the ruling. However, where the law changes through judicial intervention, it may be appropriate for a court to limit the retroactive effect of its judgment. While a substantial change in the law is necessary, it is not sufficient to justify purely prospective remedies. Once the “substantial change” threshold is met, factors such as good faith reliance by governments, fairness to the litigants and the need to respect the constitutional role of legislatures must be considered to determine whether it is appropriate to limit the retroactive effect of the remedy. Here, the M. v. H. decision marked a departure from pre-existing jurisprudence on same-sex equality rights, and all the other relevant factors also weigh in favour of limiting retroactive relief. First, given the state of the jurisprudence prior to M. v. H., the exclusion of same-sex partners from the former CPP was based on a reasonable understanding of the state of s. 15(1) jurisprudence as it existed at the relevant time. Second, the government did not act in bad faith in failing to extend survivors’ benefits to same-sex couples prior to M. v. H. Third, in seeking payment of arrears back as far as 1985, the Hislop class effectively overlooks the evolution in the jurisprudence of same-sex equality rights. Its claim for a retroactive remedy is tantamount to a claim for compensatory damages flowing from the underinclusiveness of the former CPP. Imposing that sort of liability on the government, absent bad faith, unreasonable reliance or conduct that is clearly wrong, would undermine the important balance between the protection of constitutional rights and the need for effective government that is struck by the general rule of qualified immunity.5. The court found that pre-judgment interest was payable (thankfully for class counsel as this may create the only pool of money from which they can be paid in light of the finding on retroactive benefits!)

INDIVIDUAL ACTION NOT CONSOLIDATED WITH PROPOSED CLASS ACTION

Northfield Capital Corp. v. Aurelian Resources Inc., [2007] O.J. No. 850: On the consolidation issue, the plaintiffs' position was as follows: "The Plaintiffs oppose any of such relief sought by Aurelian. The Plaintiffs submit that they would be prejudiced in delay and costs if this action were to be ordered to be consolidated or tried together with the Ontario Class Action. The proposed representative plaintiff in the Ontario Class Action, Timothy Gallagher, ("Gallagher") also opposes the relief sought by Aurelian with respect to consolidation, trial together or joint discoveries."

The court concluded: "I think it is self evident that, in view of the different stages at which this action and the Ontario Class Action are and in view of the complexity of class proceedings, the Plaintiffs will suffer considerable delay and increased costs if the actions are to be consolidated or tried together. In addition, I accept the submissions of the Plaintiffs and Gallagher that to order consolidation or trial together is tantamount to depriving the Plaintiffs of their right to opt out of the Ontario Class Action"

The court expressed the view the class proceedings were never designed to thwart or undermine the ability of individual's to control their own litigation. The court also noted that the plaintiffs had made it clear that they would opt out of any certified class action.

APPEAL TO EXPAND CLASS ACTION ALLOWED

Conseil pour la protection des malades v. Federation des medecins specialistes du Quebec, 2007 QCCA 247: The lower court had certified on a narrower basis over concerns that the society plaintiff had not authorized the amendments expanding this illegal strike class action. The Court of Appeal held that the amendments were not so fundamental as to take it outside the scope of the earlier resolutions.

COSTS APPEAL DISMISSED

Coalition pour la protection de l'environnement du parc lineaire Petit Train du Nord v. Club de motoneiges Diable et rouge inc., 2007 QCCA 405: The court dismissed a costs appeal by the plaintiff in relation to their responsibility to pay expert costs of certain defendants against whom the case was dismissed, notwithstanding that these expert costs had been shared with defendants against whom the claim was successful.

BOUCHARD V. AGROPUR FALLOUT

Boulerice v. Bell Canada, 2007 QCCS 1076: This decision illustrates the fallout the decision in Bouchard v. Agropur to adopt the Ragoonanan Principle requiring that there be a plaintiff with a cause of action against each defendant. The court allowed the plaintiff to amend to add a new plaintiff so that the action would have the necessary contractual connection to cover the claim against the existing co-defendant Bell Mobility. The court held that there was no bar against having multiple defendants in the same action, and that the allegations was substantially the same.

In Union des consommateurs v. Banque Toronto-Dominion, 2007 QCCS 1313, the court dismissed the class action against any banks with whom the proposed representative did not deal. The fact that the claim was brought under article 1048 with the consumer association as representative along with the named individual did not alter that conclusion.

LONG DISTANCE CELL PHONE CHARGES CLAIM DISMISSED

Dubuc v. Bell Mobilite inc, 2007 QCCS 1075: The court held that the plaintiff had not established a colour of right.

ACCESS TOYOTA ACTION NOT CERTIFIED

Harmegnies v. Toyota Canada, 2007 QCCS 539: The court found that the cause of action requirement was not met in this price fixing class action. The court also found that the commonality requirement was not met given that each class member would have to show that he or she would have negotiated a better price had the program not been in place. The court would also have to determine the reasonableness of the price according to geography, and the time of year.

CLASS EXPANDED

Brochu v. Societe des loteries du Quebec (Loto-Quebec), 2007 QCCS 1227: The court extended the class period of this ongoing certified VLT class action. However, the court rejected the plaintiff’s request for an open-ended definition because this would violate the requirement in Article 1005 that a date be fixed after which a class member may not opt out.

EMPLOYMENT BENEFITS CASE CERTIFIED

Tanguay v. Hydro-Quebec, 2007 QCCS 570: The defendant had increased certain premium costs. The court certified, and held that the defendant's limitation concern should not be addressed at this early stage.

AUTISM CASE SURVIVES SUMMARY ATTACK

Sagharian (Litigation Guardian of) v. Ontario (Minister of Education): [2007] O.J. No. 876: The court distinguished Wynberg v. Ontario on the basis that (1) Wynberg was decided on the evidence, and (2) the plaintiff's had at least plead into the gaps in evidence identified by the Court of Appeal in Wyberg.

MODEM HIJACKING CASES CONSIDERED

Blanchette v. Bell Canada, 2007 QCCS 863: This proposed action was dismissed on grounds that the plaintiffs did not have standing, without even applying Article 1003.

Bergeron v. Telebec, 2007 QCCS 864: This case was certified as the plaintiff did have standing.

ILLEGAL ARREST CLASS ACTION CERTFIED

Engler-Stringer v. Montreal (Ville de), 2007 QCCS 1627: The case arising out of arrests at a WTO conference was certified.

GOVERNMENT REGULATOR PROCEEDINGS STAYED IN FAVOUR OF CLASS PROCEEDING

Autorite des marches financiers c_ Lacroix. 2007 QCCS 1300: As part of the ongoing Norburg collapse litigation, there was a dispute about whether the regulator’s action should proceed in advance of the class action. The court agreed to stay the regulator’s action, but with leave for the regulator to come back if the class action became stalled.

SETTLEMENTS

Gould v. BMO Nesbitt Burns Inc., 2007 OJ 847 and 2007 OJ 1095: Court approved settlement of this securities IPO case, subject only to the parties considering further the nature of the appeal process if a class member disagreed with the finding of the claims administrator. A fund of approximately $29 million was created. Fees of $4.5 million were approved, less than the $6 million requested. Notably the court was approving a global fee that also covered a parallel Michigan action that was going to be discontinued as part of the settlement. The court expressed some concern about the effort to support the fee on a multiplier approach stating:

"My concerns were enhanced when counsel attempted to persuade me that the fee of $6 million would represent a multiplier of less than three times the value of the time that will have been expended by the conclusion of the matter. As of January 17, 2007, the time sheets and dockets provided on behalf of the six law firms recorded time of more than 50 lawyers, paralegals and students for a total value of $ 1,776,430.20. As I have earlier indicated, the Michigan action was commenced on December 5, 2005 and this action on January 25, 2006. While I do not question that the docket entries record time actually spent, they fall far short of satisfying me that it was productive time, or time that might otherwise properly be charged to a client, or allowed for the purpose of determining a base fee pursuant to section 33 of the CPA. Many of the entries are repetitive, and inscrutably uninformative, and suggest, rather than exclude, the possibility of an amount of duplication and unnecessary work..... Overall, although I do not denigrate the high professional quality of the work performed, or the benefits achieved for the class, the time recorded is, in my judgment, significantly in excess of that which could properly be charged to a client in the absence of a contingency fee agreement. The fees awarded to plaintiffs' counsel in class actions are often astronomical compared with those in other civil proceedings. They can provide an enormous, and understandable, incentive to lawyers to be over-generous in their allocation of their time and their resources. Inflated expectations of counsel can be reflected in inflated hourly rates as, for example, in the rate of $ 810 per hour reported by one of the senior counsel who performed supervisory work in the preparation of an opinion on the Class II discount. The hourly rates of other lawyers increased significantly during the proceeding but, overall, I do not consider them to be unreasonable. The application of a multiplier to a base fee is just one method of computing a contingency fee under the provisions of the CPA. It may also be helpful in some circumstances in testing the reasonableness of a fee that is expressed as a percentage of recovery in an agreement between counsel and representative plaintiffs. Its utility is more limited in a case like this where the proceedings were settled in a relatively short time. In these circumstances, the speed with which a resolution of the issues was effected can itself be considered to be a significant benefit for the class. To the extent, however, that class counsel have relied on the multiplier method to justify their fee request, my review of the time records they have provided, and of the course of the proceedings, has satisfied me that a reasonable base fee for past and future professional services would not exceed $ 1,000,000."

Cullity J. noted that the first settlement meeting was held 3 weeks after the statement of claim was filed. The court continued: " I am satisfied that, when the retainer agreements with Messrs Gould and Leach were executed in December 2005, Siskinds was aware that there was a reasonable possibility that an early settlement would be reached. There is no evidence that they informed their clients of this, or of the possibility of having variable percentages in the retainer agreements to accommodate the possibility of an early settlement. In determining whether the fee requested in this case is excessive, it is necessary to be careful not to rely on hindsight, or to penalize counsel for the quality of their work and the success they achieved in negotiating an early settlement. It is also necessary to recognize that, in December 2005, when they accepted the retainers from Messrs Gould and Leach that made their fees and disbursements contingent on success in the litigation, there was only a reasonable possibility, and no certainty, that the defendants would settle. The risks counsel assumed were not negligible. They are, nevertheless, very experienced in class action litigation and must be presumed to have been cognizant of the possibility of a speedy recovery, as well as the risks they were assuming."

Toronto Transit Commission v. Morganite Canada Co. (c.o.b. National Electrical Carbon Canada) (Hoy J.) [2007] O.J. No. 448: Price fixing in electrical carbon market. Plaintiff brought motion to discontinue this action on behalf of putative class members who are not municipal transit authorities, to amend the Amended Statement of Claim accordingly, to certify this action against a group of the defendants, and to approve the settlement arrived at with the Morgan Defendants. The court noted that there had been no publication or publicity associated with the action so that no other plaintiffs would have relied on existence of action. Further "All parties agree that the discontinuance sought is without prejudice the right of persons other than municipal transit authorities to bring individual or a separate class action or actions arising out of the allegations made in this action, and that the defendants shall not rely on any position taken by class counsel in this motion for discontinuance in any subsequent proceeding that any such persons might bring." The court certified the action stating "The requirements are the same in a settlement context as in a litigation context, although it is generally accepted that they need not be as rigorously applied in a settlement context as a litigation context". The settlement was for $825,000. Class Members are to share in this amount, less legal costs and administration fees approved by the court, in proportion to their purchases of electrical carbon products. This represented approximately 40% of the Morgan Defendants' total sales revenues during the key period.

VIOXX CARRIAGE BATTLES

Grasby v. Merck Frosst Canada Ltd., 2007 MBQB 42: The court considered the appropriate costs award arising out of the necessary adjournment of a carriage motion as a result of 13 pounds of motion material filed by the Merchant Law Group shortly before the scheduled hearing. Costs of $2500 were awarded to each of the three other groups of parties.

PARTICULARS GRANTED

Walsh v. Toronto, 2005 OJ 6276 (S.C.): This claim arose out of decisions made by the City in the exercise of its authority to grant licences to operate taxi cabs and, in particular, the decisions that were implemented by a by-law. In the past licence plates could be sold, leased or transferred by the persons to whom they were issued. This privilege was terminated. The court ordered particulars of the breach of contract and misrepresentation claims.

SYDNEY TAR PONDS APPEALNova Scotia (Attorney General) v_ MacQueen, 2006 NSCA 33: This was an appeal by a steel plant corporation and the Attorneys General of Canada and Nova Scotia from a decision denying their applications to strike the fiduciary duty portion of the plaintiffs' statement of claim. The appeal by plant was allowed, but appeals by the Attorneys General were dismissed.LEAVE APPLICATION ADJOURNED IN MICROSOFT CASEPro-Sys Consultants Ltd. v Microsoft Corp, 2007 BCCA 138: The Court adjourned the Defendant’s leave application on a pleadings issue until after the hearing of the balance of the certification application.SPOILIATION CASE TRANSFERRED TO TORONTOLeblanc v Canada (Minister of Health), 2007 OJ 1433: The proposed class included those persons who accepted payments from two compensation plans established for recipients of tainted blood and who, subsequently, lost lawsuits to, or accepted payments from parties other than the Attorney General of Canada, with respect to potential liability of those entities for transfused blood that was tainted by HIV. The plaintiffs allege that the disposal of verbatim records of meetings of the Canadian Blood Committee in 1989 caused some level of impairment to their underlying tort claims. The court transferred the claim to Sudbury stating “There is no connection between Sudbury and the factual or legal underpinnings of this claim. The convenience and cost issues both favour Toronto.”FEDS OBTAIN REMOVAL FROM FEDERAL COURT BASED ON THIRD PARTY NOTICE

Dobbie v. Canada, 2006 FC 552: The was a motion by defendants for stay of proceedings on the ground that Crown wished to institute third party proceedings against Dow Chemical Company, and Monsanto Company. The court held that the desire was genuine, and stayed the Federal Court action as the Federal Court was without jurisdiction to hear, determine third party claims herein.

PENSION CASES

Potter v. Bank of Canada, 2007 ONCA 234: This was an appeal by the plaintiffs from an order striking their claim and declining to allow the plaintiffs to bring a class action. The appellants sought to bring a class action for unlawfully extracting funds from the pension plan. The primary remedy claimed was a distribution of those amounts to the current beneficiaries of the plan. In the alternative, they asked that the bank make restitution to the plan. The appeal was allowed to the extent that s. 37(a) did not prevent the action from being brought under the CPA once the claim for direct payments was struck. Section 37(a) of the CPA encompassed actions that could be brought under Rule 10. Given that the Act was designed in part to make it procedurally easier to bring actions that would otherwise have to be brought as representative proceedings under the rules, it would be anomalous to interpret s. 37(a) as automatically removing that remedial benefit for action that could be brought as representative proceedings under Rule 10. The correct interpretation of s. 37(a) was that it precluded resort to the Act only where another piece of legislation provided expressly for representative proceedings.

On the second issue, the court agreed that it was plain and obvious that the claim for direct payments could not succeed. Such payments would give class members more than they were entitled to receive from the plan, and preferred current beneficiaries over future contingent beneficiaries.

King v. Canada, 2007 FC 272 (T.D.): The court adjourned an application to strike out this pension benefits case. The plaintiff sought damages for breach of "statutory contract" and "statutory duty" arising out of the defendant's failure to award interest on a retroactive disability pension benefits paid under the Canada Pension Plan. The court refused to strike the action at this time, as it was of the view that the plaintiff had not yet exhausted its remedies to obtain interest under the act. The action was stayed so that the plaintiff could do so, and then consider the advisability of a an application for judicial review.

MacDougall v. Ontario Northland Transportation Commission, 2007 OJ 573 (Div.Ct): The plaintiffs appealed a failure to certify this case complaining about changes made to a defined benefit plan. The appeal was rejected on the basis that there was no palpable error.

Gardner v. General Motors Corp (unreported, February 14, 2007) 96359CP/05 (Ont.S.C.): Plaintiff’s alleged that there were promised “substantially similar” pension benefits on a reorganization. The court certified the action. A few interesting points:Creative pleading: The plaintiffs plead the case only in contract, avoiding negligent misrepresentation. The court held that there was nothing improper about this effort, but the case would obviously be determined based on contract law alone.Common issues: “The plaintiffs are not required to show that everyone in the class shares the same interest in the resolution of the asserted common issue, only that each member as an interest in the resolution of the common issue…”(para.23)Overinclusiveness: “The fact that some, as yet unidentified, class members may not sustain a shortfall is no reason to deny access to the CPA to those who will.” (para.25)Vivendi Canada Inc v Philp, 2007 OJ 1222 (S.C.): Court certified this surplus case on consent, with an intended settlement to follow.AUTOMOBILE CLASS ACTIONS

Risorto v. State Farm Mutual Automobile Insurance Company [2007] O.J. No. 676 (Cullity J.): This aftermarket parts case was not certified even though was based on similar evidence to a previously certified case Hague v. Liberty Mutual. The decision is under appeal.

Vermette v. General Motors du Canada ltee. 2007 QCCS 1023: In rejecting this paint delamination class action, the Quebec court came close to making a adopting a legal test akin to a preferability stating: "It was never intended by the legislator to simply "bunch" together many diverse claims related only by some similarities so that fewer trials against any particular defendant might be the result. The objective of class actions here in Quebec and elsewhere on the continent is social in purpose; this means that where large groups of people have been injured or prejudiced in the same way by the same defendant, their relief may be sought together as a group so as to save time, money, and avoid the real possibility of many different judgments...The claims of the requested class as alleged by Petitioners are remarkable by their diversity and individuality. The variety of possible causes of rust and paint chipping is sufficiently broad to query whether there is sufficient common ingredient to warrant certifying in this case. Care must be taken where a defendant in a class action might be forced into literally hundreds, if not thousands of different factual defences as a result of members of a class having too varied causes of action."

McNaughton Automotive Ltd. v. Co-operators General Insurance Co, 2007 OJ 1453: In one of the last gasps (I know I’ve said that before) of the deductibles litigation, the court assessed costs of the decision setting aside the certification order. Given the unusual history of the case, the novelty of the issues, and the public importance of the litigation, no costs were awarded to either party in relation to the appeal or the original successful certification order.

PRODUCTS LIABILITY CLASS ACTIONS

Bondy v. Toshiba of Canada Ltd, 2007 OJ 784: Court certified this defective computer case. The allegation is that these problems were caused by a common defect, namely that the cooling system was inadequate to dissipate the heat generated by the Central Processing Unit ("CPU"), which caused the Notebooks to overheat, shut down or otherwise fail to perform at the high processing speed expected of a 1.1GHz Pentium III CPU.Common issues: The court certified negligence and warranty common issues, but also two negligent misrepresentation issues arising out of the alleged representations that Notebooks were the "ultimate multimedia machine", and that they possessed 1.1GHz Pentium (R) III processing speed.Class Representatives: The defendants tried to argue that the proposed representatives were too sophisticated, having had some training in computers. The court rejected this concern stating “In argument before me, it was hotly disputed whether any liquid got into MacPherson's Notebook, or whether any spill caused any damage whatsoever. I think that the technical education and experience of Bondy and MacPherson would be a help, rather than a detriment, to the other class members.” The court approved both representatives stating: “In my view, it is advisable, in an action of this sort, to have two or more representative plaintiffs, to avoid procedural difficulties should something happen to one of them. At the moment the two plaintiffs in this action are in my view, well able to represent the members of the class, and I would accept them as representative plaintiffs. However, as above indicated, I would be prepared to add another representative plaintiff, if asked, to serve together with Messrs. Bondy and MacPherson or in place of Mr. Bondy.”Preferable Plan: The court noted that the plaintiffs were asking for their money back generally. But “If however, there are each individual issues that would require individual hearings of some kind, after the common issues are resolved, it is my view that the proposals for using a referee (or in my view referees) plus a simplified individual claims and hearing process could quite satisfactorily deal with the problem.”

Vidal v. SFS Logic-Fisc inc, 2007 QCCS 1032: The court approved a discontinuance of the certified class action against a particular defendant. It was clear that the defendant did not have the resources to satisfy any judgment, and the case against him was weak.

Davis v. Canada (Attorney General) 2007 NLTD 25: The plaintiffs applied for certification of a class action on behalf of over 7,000 individuals of Mi'kmaq Indian ancestry. They defined class membership by reference to Mi'kmaq ancestry and to residency on the island of Newfoundland at any time and for any period after April 1, 1949. They excluded from the proposed class several thousand others of Mi'kmaq ancestry who belong to the Federation of Newfoundland Indians, which organization asserts the same legal rights as the plaintiffs, but which sought in part, a different remedy.The plaintiffs put forward a number of claims essentially asserting a denial of status as Indians under the federal Indian Act and a consequent loss of entitlement to various statutory benefits. They claim to be entitled to be registered as Indians under the Indian Act, to have statutory bands created for them and to have land reserves set aside for them. They also seek $ 5.2 billion in damages.

The Court dismissed the application for certification as a class proceeding.

Class Definition: While some common issues could be extracted from the many broad issues set out in the pleadings, the class definition represented a moving target in relation to one or more of the common issues. The court stated: "Mi'kmaq ancestry is defined by the plaintiffs; that definition is at least workable and it is not dependent on the outcome of the litigation. But the criterion of residency on the island of Newfoundland on or after 1949 is not further defined. Clearly, the plaintiffs do not propose that the claim be limited to individuals living on the island at a particular date. The suggestion is that residency at any time after April 1, 1949 is sufficient. This criterion does not allow for ready identification of members. There is no amplification of what is meant by residency, and in particular no details on whether a minimum length of time would be required, or on the subjective intention that may be needed. While in many cases the satisfaction of the residency requirement may be self-evident, in others an individual assessment against a determined standard will be needed. In the context of this proceeding, should residency be disputed, the court would have to make individual assessments in order to determine entitlement to membership. Further, without a clearer definition of what is meant by residency, an individual receiving notice of the proceeding may well not know whether he or she qualifies to be a member of a class." The court also noted the difficulty of ascribing a "duty to consult" to class members resident after 1949. (para.49) The court noted that many members of the proposed class were members of other bands already.

Further, the exclusion of thousands of Mi'kmaq Indians who assert the same legal rights made the present proceeding less amenable to certification. Much of the relief claimed could not be ordered by the court. Land creation and registration are statutory in character and may only be obtained through the processes contemplated by the Indian Act. Given the political nature of much of the relief sought, the politically motivated restriction of the class, and the likely benefit of being able to litigate one or more of the common issues in a limited test case, a class action was not the preferable manner of proceeding.

Erik Schult v. United Technologies Corporation, Carrier Corporation and UTC Canada: All persons in British Columbia who own, or have owned, one of the affected Furnaces as described in the Statement of Claim.